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Cancellation of GST registration can be done voluntarily in cases where the business is inactive or does not meet the required turnover criteria. Additionally, a GST officer has the authority to cancel a GST registration if the business is found to be non-compliant with GST regulations. Once the GST registration is cancelled, the individual or entity is no longer obligated to file GST returns or collect/pay GST.
In the event that an individual or entity with GST registration wishes to cancel their registration, they must submit a cancellation request in the prescribed Form GST REG-16 to the GST Department. Upon thorough examination of the application, if the GST Officer is satisfied, they will issue an order to terminate the GST registration in Form GST REG-19.
The following are some of the primary reasons for voluntary cancellation of GST registration:
By voluntarily cancelling their GST registration, business owners can avoid the unnecessary burden of monthly GST return filing and the associated penalties or late-filing fees.
An officer is authorized to initiate the cancellation of a GST registration under the GST Act if there is sufficient justification to do so. The process for GST Cancellation by Officer commences with the issuance of a show-cause notice in Form GST REG-17.
A GST officer may initiate the cancellation process if any of the following events occur:
In the event of cancellation by the GST Officer, the Officer shall notify the taxpayer whose GST registration is liable to be terminated before cancellation. The taxpayer shall be given a reasonable opportunity to be heard before their GST registration is cancelled.
The notice to the taxpayer from the GST Officer shall be sent in Form GST REG-17, specifying the reasons why the GST registration should be cancelled. The notice shall also allow the taxpayer to respond to the notice and schedule a hearing if necessary.
If the taxpayer responds to the notice and the proper authority is satisfied with the response, he or she may dismiss the case and issue an order in Form GST REG-20. If the proper authority is not satisfied, he or she may issue a Form GST REG-19 order cancelling the GST registration.
IndiaFilings offers assistance to taxpayers in cancelling their GST registration through an online process. Prior to initiating the procedure, it is imperative for the taxpayer to ensure that all pending GST returns have been filed. In case of non-compliance with GSTR-3B, GSTR-1, or the GST annual return, the overdue return must be filed before commencing the GST cancellation process.
Step 1:
The GST cancellation application is to be submitted using Form GST REG-16 on the common GST portal. The application must include the following information:
Step 2:
The GST Officer will review the application and issue an order of cancellation in Form GST REG-19 within 30 days from the date of application. The cancellation will be effective from a date determined by the Officer, who will notify the taxable individual accordingly.
If you wish to cancel your GST registration, we recommend consulting an GST Expert. Our team will assess your GST return filing status, assist you in completing any pending GST returns, and initiate the GST cancellation process on your behalf.
Furthermore, we will closely monitor your GST registration cancellation application, address any queries you may have, and guide you through the completion of the process once the application has been submitted.
Before embarking on the process of canceling GST registration, it is imperative for the applicant to settle any outstanding GST liabilities promptly. Additionally, the taxpayer must clear the input tax associated with the stock of inputs, semi-finished goods, finished goods, and capital goods, or address the output tax liability pertaining to these goods—opting for the larger of the two.
Acknowledging that the GST registration cancellation renders the taxpayer ineligible to claim Input Tax Credit (ITC), it becomes incumbent upon the applicant to reimburse the input tax credit on the prevailing stock.
Facilitating the final GST payment, the taxpayer can utilize the GST electronic credit or cash ledger, ensuring that this payment coincides with the submission of the final GSTR-10 return.
The application for GST cancellation may face rejection by the concerned Officer under certain circumstances:
Incomplete Application:
If the submitted application lacks essential information or documentation, the concerned Officer may reject it. It is crucial for applicants to ensure that all required details are provided accurately.
Non-Registration of New Entity:
In cases of business transfer, merger, or amalgamation, the new entity formed as a result of these processes must be registered with the tax authority before applying for GST cancellation. Failure to meet this prerequisite may lead to application rejection.
In the event of a rejection, the concerned Officer issues a written intimation outlining the nature of the discrepancy. Subsequently, the applicant is granted a seven-day window to respond. Failure to provide a satisfactory response within the stipulated period may lead to the rejection of the application, following an opportunity for the applicant to present their case.
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